An official from the State Bank of Vietnam (SBV) has rejected allegations by some international news agencies that the country may restrict foreign investment to cool its overvalued securities market.
The official wishing to remain anonymous told Thanh Nien on Thursday that SBV has never issued any such regulation and would consider a variety of measures in line with international norms to deflate and stabilize the market.
On February 14, some international news agencies reported that the bank intended to restrict investment flows in and out of the Vietnamese securities market, where the umbrella index, VN-Index, has surpassed 1,000 points, causing fears that the bubble may burst and the market may crash.
The news agencies reported that the Vietnamese government is considering banning foreign investors from selling their bonds and stocks for one year after buying securities on the Vietnamese market.
In reaction to the news, Bui Thi Kim Oanh, representative of the Thailand-based Finansa fund management firm, said one effective measure currently acting to cool the overheating market is Vietnam’s regulation restricting foreign investors to a maximum of 49% stake in listed companies and 30% in listed banks.
The other alleged measures are to restrict short-term investment but Oanh believes the market needs both long and short term investment.
Following the agencies’ claims, other allegations arose inside Vietnam that the central bank plans to strictly monitor the transfer of profits from indirect investment and that the government will restrict the opening of foreign investment funds by adding more bulky paperwork.
Another representative of a foreign investment fund said that the VNindex has been driven up recently by domestic investors mostly, especially individual ones, not by foreigners. Domestic investors account for 80 percent of total the transaction volume.
Thus, he said that applying restrictive measures as alleged would be ineffective.
A senior official from the State Securities Commission, a government stocks and bonds watchdog, said that the agencies’ claims are sensitive and have been exacerbated by authorities’ official silence, which has only added to foreign investors’ worries.
Source: Thanh Nien Mekong capital vinacapital
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